If purchasing a home in Ottawa that currently has a tenant and you would like to live in it, it is important to ask for vacant possession in your offer.
Many purchasers when looking at a property with the current tenant in place, plan to close on the property first. From there, they plan to give the tenant notice to vacant once they are the new owners. However, if there is a tenant occupying the property on closing a lender will feel differently. The lender will look at the property as a rental property regardless of your intentions. With that, you need to ask for vacant possession. As a rental the down payment must be at least 20% of the purchase price any interest rates may be higher.
There are virtually no lenders that will make an exception to this. Also, many lenders will want confirmation the tenants have been given notice to vacant. This notice is called a N12 which is a notice that is given to the tenants.
As a current owner who is selling a tenanted property, in this situation, you will need to make arrangements with the tenants to assure the property is vacant for the closing date. As a seller it’s important to know the rules and guidelines set out by the Landlord and Tenants Board.